The lateral trend in the Flat market, the personal forex trading tips you need

Flat on Forex (neutral or lateral trend) is characterized by price movements in the channel. In other words, this is the price movement of the market, to the side with small vertical changes - fluctuations.

The movement of prices in this case is carried out within the limits of the channel of small sizes, therefore, as a rule, trade is conducted most often from the boundaries of a given corridor (channel).


Fig. 1

Speaking about the peculiarities of the market, forex flat is the opposite concept to the trend, and accordingly is responsible for the reverse market state. When the market is in a trend state, then we can observe the minima that rise or vice versa, the highs that go down.

When there is, flat, i.e. There is a flat state on the market, you can create a price channel in which the price circulates from the upper level to the lower level for a while. Moreover, the boundaries of the channel are different horizontality, which makes them analogous to the levels of support and resistance.

Quite often, such a state of the market can be observed, in the period between trading sessions - when the volumes go down. The decrease in volumes is the main factor that explains the neutral state of price movement, since at small volumes the price has no momentum to move further up or down and accordingly produces movements in a small range.

To correctly determine the flat state, you need to carefully evaluate the price chart: if the graph contains consecutive (located at the same level) minima and highs, then this will be the main feature. The main thing - do not forget that the flat on the chart is denoted by the lines of support and resistance, which are conducted through the minima and maxima and directed horizontally.

How exactly is it necessary to carry out trading?

A flat in the foreign exchange market is a neutral state and a time when the forces of bulls and bears are in equal conditions, and therefore neither one nor the other is sufficient to create an upward or downward trend, so the market has no clear state. Basically, exchange players who prefer to trade on a trend, they do not make transactions on the market during a flat, this is due to the profit, or rather, in fact, its absence.

But the trade in the flat state of the market is very popular among the supporters of channel strategies.

So, trading in flat:

1) buy from the support line;

2) sell at the resistance line;

3) do not forget about pending orders (stop loss, due to the creation of a false breakout price).

In order to reliably recognize the flat, you can use forex oscillators, whose data are in the range from 0 to 100 and the middle line. This is easy to do with the MACD indicator or the Stochastic indicator, determine the tops or troughs of the lateral trend, as well as the end points of the flat.